The opinion of the court was delivered by: Yvette Kane, Chief Judge United States District Court Middle District of Pennsylvania
Before the Court are several motions in limine filed by both parties. The motions are fully briefed and ripe for disposition. The Court will consider all the motions in this order.
A. Factual Background*fn1
In September 2005, the Plaintiffs Darrel Steffy and his wife, Susanne Steffy, began construction of a building on their property for various uses, including: storage, fitness, entertaining friends, display space for hunting trophies, and office space. (Doc. No. 67 ¶ 3.) While browsing around Home Depot, Mr. Steffy spotted plywood and decided to use it to panel the interior walls of the building (other than the garage) because it would be cheaper and more sturdy than drywall. (Doc. No. 67 ¶ 11) On or about November 10, 2005, he purchased 300 four by eight foot sheets of 3/4 inch thick, 13 ply, cabinet grade plywood from The Home Depot ("Home Depot") at $23.00 per sheet. (Id..) He purchased an additional 100 sheets of similar plywood on January 3, 2006. (Id. ¶ 14.) This plywood was supplied to Home Depot from Defendant Patriot Timber Products. (Doc. No. 63 ¶ 17.) After the project was completed, starting around February 2006, people inside the building began to notice adverse effects from being inside the structure, including: watering and burning eyes, headaches, and burning in the throat. (Doc. No. 63 ¶ 21.)
When a handheld device revealed formaldehyde in the air, Mr. Steffy contacted Edward Montz Jr.'s ("Montz") of Indoor Air Solutions ("IAS") to test the building's air on July 20, 2006. (Doc. No. 67 ¶¶ 19-20.) Following the results from these tests on the plywood paneling, Montz concluded that "[t]he paneling obtained by Mr. Steffy and installed in the above-referenced building is a very potent source of formaldehyde in the building (estimated to be over 20 times the OSHA maximum Permissible Exposure Limit for industrial workplace environments at the time of installation)." (Doc. No. 63-7, Ex. G at 6 at 10.) He further concludes that of the various options to fix the problem, the best would be "a complete removal of all of the paneling and any reservoirs in the building which currently exist." (Id. at 11.) Defense experts disagree with Montz's conclusion on causation and instead conclude that decisions made in construction of the building, other formaldehyde producing materials, and an inadequate ventilation system have caused the formaldehyde problem. (Doc. No. 64 ¶¶ 60-64.)
Plaintiffs filed their original complaint two and a half years ago on November 15, 2006, discovery is closed, pre-trial motion deadlines have passed, and trial is currently scheduled to begin next week. The defense motions in limine were advanced jointly by the Defendants Home Depot and Patriot Timber Products, though Patriot Timber's has previously had all claims against it dismissed.
Almost all of the motions in limine by both parties seek to exclude evidence on the basis of relevance or prejudice. Rule 402 of the Federal Rules of Evidence provides that "[a]ll relevant evidence is admissible, except as otherwise provided by the Constitution of the United States, by Act of Congress, by these rules, or by other statutory authority. Evidence which is not relevant is not admissible." Fed. R. Evid. 402. Relevant evidence is defined as evidence "having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without evidence." Fed. R. Evid. 401.
A. Repair Damages in Excess of Market Value
Home Depot argues that the Plaintiffs should be precluded from introducing evidence of "money damages for the repair of their building in excess of [the market value of the building]." (Doc. Nos. 92; 132.) The Plaintiffs have argued that their recovery should not be limited by market value because it is a special purpose structure, but the Court rejected that argument in its memorandum and order resolving the Defendants' motions for summary judgment: "[t]he Court does not agree with the Plaintiffs that their building meets the definition of a "special-purpose property" to qualify for a special damage measure. . . . Therefore, the Court finds that the Plaintiffs will be limited to the lesser of the cost of repair or the market value of the building." (Doc. No. 185 at 35.) Despite this, it is clear under this damages formulation-the general standard in Pennsylvania when there is repairable harm to real property-that the Plaintiffs must introduce evidence regarding the cost to repair their building in order to justify recovery up to the fair market value. As such, this evidence is not irrelevant and the Plaintiffs will not be precluded from introducing evidence regarding the cost to repair the structure. But, the Court will instruct the jury that such costs are not recoverable over the amount of the building's fair market value.
Home Depot argues that Plaintiffs should be precluded from making any reference to China, the plywood's country of origin, or Kerry Lu, the agent Patriot Timber Products dealt with in purchasing the plywood. (Doc. Nos. 96; 134.) Home Depot argues that this evidence is not relevant to facts at issue under Rule 402 of the Federal Rules of Evidence because the plywood's origin does not tend to prove anything about formaldehyde content or any alleged lack of labeling. (Doc. No. 97 at 4-5.) They further argue that even if it is relevant, such evidence should be excluded under Rule 403 because the probative value would be outweighed by potential prejudice, referencing the numerous widespread media reports of dangerous products from China in recent years. (Id. at 5.) After careful consideration of the arguments advanced on both sides in the briefs and at oral argument, the Court will grant the Defendant's motion. The Court is not persuaded by the Plaintiffs' arguments that the plywood's origin is relevant to any issue remaining in this case or that it is necessary to their presentation for the jury. Further, the Plaintiffs' brief was submitted prior to the Court's memorandum and order dismissing their punitive damage claims and it appears that some of their arguments as to relevance of the plywood's origin-that the plywood was "dumped" on the United States market at low price-rely on the existence in the case of these rejected claims. (Doc. No. 172 at 4.) As such, the motion will be granted.
C. Reference to Inapplicable Laws, Regulations, and Standards
Defendant also moves to exclude at trial "any and all references" that might be made to federal Occupational Safety and Health Act ("OSHA") regulations governing plywood, and to California regulations respecting composite wood products that went effective in 2009. (Doc. No. 100, at 3.) Defendant generally moves to exclude "any testimony or evidence" regarding "any other laws, regulations or standards that do not apply to the plywood at issue." (Doc. No. 100, at 1.) In support of the motion, Defendant contends that any reference whatsoever to these allegedly inapplicable laws and regulations would be entirely irrelevant to the issues of this case and, even if relevant, should be excluded because of the mention of these laws and regulations would be substantially prejudicial or confusing to the jury. Upon consideration, the motion will be denied.
The Court does not agree that because OSHA and other state regulations do not govern the plywood at issue that they must therefore be entirely irrelevant to the issues in the case. Review of the expert report of Dr. W. Edward Montz, Jr., reveals that in discussing his company's inspection and testing activities, and the conclusions reached as a result of such analysis, he observed that the concentration of formaldehyde found in Plaintiffs' house was far in excess of what would be allowable under OSHA in occupational setting. (Doc. No. 63-7, at 10.) Immediately after noting this finding, Dr. Montz acknowledged that OSHA regulations do not govern this case because it concerns a residential building rather than an occupational space. (Id.) But the fact that OSHA does not regulate the allowable amount of formaldehyde in the plywood used in residential buildings does not mean that its standards are therefore irrelevant to what constitutes a potentially hazardous levels of formaldehyde exposure in general. Dr. Montz observes in his report that OSHA action levels with respect to formaldehyde are set and designed only to mitigate the risks of cancers and other acute health concerns, rather than less serious but still significant health considerations. In part for this reason, Dr. Montz concludes that OSHA action levels are substantially below those that would actually render a residential building fit for occupancy because even low levels of formaldehyde exposure can cause occupants to experience numerous adverse health effects and unpleasant symptoms. In consideration of Dr. Montz's report and the parties' briefs, the Court concludes that although OSHA's action levels are not be dispositive as to whether the formaldehyde concentration in plywood used in Plaintiff's residential building rendered it unfit for its ordinary use, OSHA's standards are not necessarily irrelevant to what constitutes a dangerous level of formaldehyde exposure resulting from Defendant's product.*fn2
Although it is clear that Dr. Montz considered OSHA action levels in the course of conducting his analysis and generating his expert report, and that mention of OSHA standards might be introduced during his testimony, it is less clear how Plaintiffs might try to introduce evidence regarding California's newly implemented regulations governing formaldehyde concentrations in composite wood products. To the extent that Plaintiff intends to introduce such evidence at trial, the Court will make a determination at that time whether the evidence may be properly admitted and Defendant may revisit its objection to such evidence. However, the Court must find at this point that Defendant has failed to sustain its burden of demonstrating that the Court should act in advance to forbid any mention of state regulations governing formaldehyde concentrations in composite wood products, as issues regarding its relevance are at this point, speculative.
Further, to the extent the Defendant maintains its objection that this evidence is prejudicial, the Court will reserve ruling until trial, when it has a full record relevant to the putatively objectionable evidence. See In re Paoli R.R. Yard PCB Litigation, 916 F.2d 829, 859 (3d Cir. 1990.)
D. Reference to Newspaper Articles and Media Reports
The Defendant has moved to preclude any and all references to newspaper articles and media reports regarding Chinese products and the formaldehyde content of Chinese products. (Doc. Nos. 102; 138.) The Plaintiffs do not offer any argument against this contention, stating merely that the motion is moot as they have not included any such items in their trial exhibit list. The Court has found that reference to China as the plywood's country of origin is precluded as irrelevant under Rule 402; reference to such newspaper articles or media reports is precluded for the same reasons.
E. Introduction of Government Reports Regarding Formaldehyde
Defendant moves to preclude Plaintiff from introducing, whether through testimony or other evidence, a report by the Center for Disease Control ("CDC") relating to dangers stemming from the use of formaldehyde in homes and a second report issued by the United States House Committee ("House") investigating the use of formaldehyde in housing trailers provided to persons displaced by Hurricane Katrina. (Doc. No. 105.) Defendant contends that either report -- both of which were appended to a declaration of Plaintiff's expert, Dr. W. Edward Montz, Jr. -- are irrelevant. Alternatively, Defendant asserts that even if relevant, the prejudice of the reports substantially outweighs their evidentiary value. Defendant also asserts that either report constitutes inadmissible hearsay.
The Court disagrees that the CDC report is irrelevant. Moreover, it appears possible if not likely that the report constitutes a public record and thus would be admissible as an exception to the hearsay rule, contrary to Defendant's contention otherwise. See Fed. R. Evid. 803(8). The CDC report was appended to a declaration of Dr. Montz that Plaintiff offered in opposition to Defendant's motion for summary judgment in order to demonstrate that literature exists documenting the health risks posed by formaldehyde, specifically in the context of residential homes. The Court disagrees that the CDC's report is irrelevant to any fact in this case, in particular facts demonstrating the harmful effects of formaldehyde -- an issue about which Dr. Montz will testify and which informed his expert opinion. In short, Defendant has failed to persuade the Court that any evidence regarding the CDC report must be excluded.
As for the California report, it is unclear at this pretrial stage how such evidence may be introduced and on what issues. Accordingly, the Court will reserve ruling on the relevance of this evidence. Further, to the extent the Defendant maintains its objection that the reports are prejudicial, the Court will reserve ruling until trial, when it has a full record relevant to the putatively objectionable evidence. See In re Paoli R.R. Yard PCB Litigation, 916 F.2d 829, 859 (3d Cir. 1990.)
F. Evidence in Pursuit of Punitive Damages
The Defendant has moved to preclude the Plaintiffs from introducing evidence or testimony in support of their punitive damage claims. After this motion was filed, the Court dismissed the Plaintiffs' punitive damage claims. As such, any evidence relating solely to those claims is not relevant to any remaining issue in the case and the motion will be granted.
G. Speculative Expert Testimony on Building Valuation
The Defendant initially moved to preclude evidence of the building's highest and best use by Plaintiffs' expert Weinstein. (Doc. Nos. 115; 145.) In light of the Court's order resolving the parties Daubert motions, the ...